OVERLAND PARK, Kan., Dec. 07, 2017 (GLOBE NEWSWIRE) -- Ferrellgas Partners, L.P. (NYSE:FGP) (“Ferrellgas” or the “Company”) today reported financial results for its first fiscal quarter ended October 31, 2017. The Company reported a net loss attributable to Ferrellgas Partners, L.P. of $47.9 million, or $0.49 per common unit, compared to a net loss attributable to Ferrellgas Partners, L.P. of $43.1 million, or $0.44 per common unit, for the prior year period.

/EIN News/ -- The Company reported that total gallons sold in the first quarter increased more than 9.5 million gallons over the same period in the prior year, which partially offset the effects of lower margins as the Company aggressively competes for new customers. The Company reported adjusted EBITDA of $26.2 million, compared to $29.0 million in the prior year period.

At the end of this first quarter of the Company’s fiscal year, its leverage ratio was 7.57x reflecting peak working capital requirements. This level was lower than the 7.75x limit allowed under its secured credit facility and accounts receivable securitization facilities, as amended in April 2017. Based on the Company’s current forecast, the leverage ratio is expected to continue to strengthen and decrease throughout the fiscal year.

“Ferrellgas has entered the winter heating season with renewed vigor, and while we are optimistic about temperatures nearer to the norm we are focusing on several initiatives that will increase EBITDA regardless of weather,” said James E. Ferrell, the Company’s interim President and Chief Executive Officer. “Our Retail propane operations continue to add customers in significant numbers across all segments positioning the Company for potential future volume and cash flow growth. Further, we’ve closed on a number of accretive, bolt-on acquisitions that complement our strategic footprint. In our Blue Rhino business, we are reconfiguring our production facilities footprint in order to reduce freight costs and streamline production initiatives that are particularly important as we added more than 2,300 new Blue Rhino locations in Q1 with more added since quarter end. Blue Rhino growth is also important to us because is it less weather dependent. As for Midstream operations, the business has stabilized and is now focused on growth particularly in its trucking operations. The business exited a barge lease that was a significant headwind for EBITDA, and we are evaluating certain underperforming assets to find the best way to move forward with them.”

Mr. Ferrell continued, “These initiatives are the product of a leaner, more agile organization with a flatter management structure. I like our management team including the recent addition of Doran Schwartz as our Chief Financial Officer complementing an already strong and seasoned leadership team. All of our employees are focused and working hard to generate more cash flow. We are well positioned for fiscal 2018 and building a foundation for the long-term success of our Company.”

About FerrellgasFerrellgas Partners, L.P., through its operating partnership, Ferrellgas, L.P., and subsidiaries, serves propane customers in all 50 states, the District of Columbia, and Puerto Rico, and provides midstream services to major energy companies in the United States. Ferrellgas employees indirectly own 22.8 million common units of the partnership, through an employee stock ownership plan. Ferrellgas Partners, L.P. filed a Form 10-K with the Securities and Exchange Commission on September 28, 2017. Investors can request a hard copy of this filing free of charge and obtain more information about the partnership online at www.ferrellgas.com.

Forward Looking Statements Statements in this release concerning expectations for the future are forward-looking statements. A variety of known and unknown risks, uncertainties and other factors could cause results, performance and expectations to differ materially from anticipated results, performance and expectations. These risks, uncertainties and other factors include those discussed in the Form 10-K of Ferrellgas Partners, L.P., Ferrellgas Partners Finance Corp., Ferrellgas, L.P., and Ferrellgas Finance Corp. for the fiscal year ended July 31, 2017, the Form 10-Q of these entities for the fiscal quarter ended October 31, 2017, and in other documents filed from time to time by these entities with the Securities and Exchange Commission.

Accounts and notes receivable, net (including $137,244 and $109,407 of accounts receivable pledged as collateral at October 31, 2017 and July 31, 2017, respectively)

191,428

165,084

Inventories

112,338

92,552

Prepaid expenses and other current assets

68,068

33,388

Total Current Assets

378,934

296,784

Property, plant and equipment, net

738,729

731,923

Goodwill, net

256,103

256,103

Intangible assets, net

250,629

251,102

Other assets, net

80,559

74,057

Total Assets

$

1,704,954

$

1,609,969

LIABILITIES AND PARTNERS' DEFICIT

Current Liabilities:

Accounts payable

$

99,198

$

85,561

Short-term borrowings

263,200

59,781

Collateralized note payable

88,000

69,000

Other current liabilities

200,879

126,224

Total Current Liabilities

651,277

340,566

Long-term debt (a)

1,812,155

1,995,795

Other liabilities

34,799

31,118

Contingencies and commitments

Partners Deficit:

Common unitholders (97,152,665 units outstanding at

October 31, 2017 and July 31, 2017)

(754,456

)

(701,188

)

General partner unitholder (989,926 units outstanding at

October 31, 2017 and July 31, 2017)

(67,528

)

(66,991

)

Accumulated other comprehensive income

32,915

14,601

Total Ferrellgas Partners, L.P. Partners' Deficit

(789,069

)

(753,578

)

Noncontrolling Interest

(4,208

)

(3,932

)

Total Partners' Deficit

(793,277

)

(757,510

)

Total Liabilities and Partners' Deficit

$

1,704,954

$

1,609,969

(a)

The principal difference between the Ferrellgas Partners, L.P. balance sheet and that of Ferrellgas, L.P., is $357 million of 8.625% notes which are liabilities of Ferrellgas Partners, L.P. and not of Ferrellgas, L.P.

FERRELLGAS PARTNERS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per unit data)

(unaudited)

Three months ended

Twelve months ended

October 31

October 31

2017

2016

2017

2016

Revenues:

Propane and other gas liquids sales

$

302,758

$

242,399

$

1,378,771

$

1,199,466

Midstream operations

120,760

108,044

479,419

539,612

Other

31,137

29,099

147,200

208,685

Total revenues

454,655

379,542

2,005,390

1,947,763

Cost of sales:

Propane and other gas liquids sales

179,515

119,212

754,458

561,894

Midstream operations

108,125

94,642

442,922

412,272

Other

13,702

11,746

69,223

123,535

Gross profit

153,313

153,942

738,787

850,062

Operating expense

110,462

104,992

437,221

447,921

Depreciation and amortization expense

25,732

26,202

102,881

139,736

General and administrative expense

13,164

12,482

47,662

48,821

Equipment lease expense

6,741

7,349

28,516

29,150

Non-cash employee stock ownership plan compensation charge

3,962

3,754

15,296

26,093

Non-cash stock-based compensation charge (a)

-

1,881

1,417

3,083

Asset impairments

-

-

-

628,802

Loss on asset sales and disposal

895

6,423

8,929

22,341

Operating income (loss)

(7,643

)

(9,141

)

96,865

(495,885

)

Interest expense

(40,807

)

(35,428

)

(157,864

)

(139,577

)

Other income, net

511

508

1,477

740

Loss before income taxes

(47,939

)

(44,061

)

(59,522

)

(634,722

)

Income tax expense (benefit)

377

(590

)

(176

)

218

Net loss

(48,316

)

(43,471

)

(59,346

)

(634,940

)

Net loss attributable to noncontrolling interest (b)

(401

)

(398

)

(297

)

(6,245

)

Net loss attributable to Ferrellgas Partners, L.P.

(47,915

)

(43,073

)

(59,049

)

(628,695

)

Less: General partner's interest in net loss

(479

)

(431

)

(590

)

(6,287

)

Common unitholders' interest in net loss

$

(47,436

)

$

(42,642

)

$

(58,459

)

$

(622,408

)

Loss Per Common Unit

Basic and diluted net loss per common unitholders' interest

$

(0.49

)

$

(0.44

)

$

(0.60

)

$

(6.35

)

Weighted average common units outstanding - basic

97,152.7

97,457.6

97,443.7

97,949.0

Supplemental Data and Reconciliation of Non-GAAP Items:

Three months ended

Twelve months ended

October 31

October 31

2017

2016

2017

2016

Net loss attributable to Ferrellgas Partners, L.P.

$

(47,915

)

$

(43,073

)

$

(59,049

)

$

(628,695

)

Income tax expense (benefit)

377

(590

)

(176

)

218

Interest expense

40,807

35,428

157,864

139,577

Depreciation and amortization expense

25,732

26,202

102,881

139,736

EBITDA

19,001

17,967

201,520

(349,164

)

Non-cash employee stock ownership plan compensation charge

3,962

3,754

15,296

26,093

Non-cash stock based compensation charge (a)

-

1,881

1,417

3,083

Asset impairments

-

-

-

628,802

Loss on asset sales and disposal

895

6,423

8,929

22,341

Other income, net

(511

)

(508

)

(1,477

)

(740

)

Severance expense $358 and $414 included in operating expense for the three months ended period October 31, 2017 and 2016, respectively. Also includes $1,305 and $1,055 included in general and administrative expense for the three months ended October 31, 2017 and 2016, respectively. Includes $358 and $938 in operating expense for the twelve months ended October 31, 2017 and 2016, respectively. Also includes $1,795 and $1,128 in general and administrative expense for the twelve months ended October 31, 2017 and 2016, respectively.

1,663

1,469

2,153

2,066

Unrealized (non-cash) losses (gains) on changes in fair value of derivatives $1,607 and $1,839 included in cost of sales for the three and twelve months ended October 31, 2017, respectively, and $308 and $(140) for the three and twelve months ended October 31, 2016, respectively. Also includes $(2,120) included in operating expense for the twelve months ended October 31, 2017, and (1,877) and (1,330) for the three and twelve months ended October 31, 2016, respectively.

1,607

(1,569

)

(281

)

(1,470

)

Acquisition and transition expenses (included in general and administrative expense)

-

-

-

84

Net loss attributable to noncontrolling interest (b)

(401

)

(398

)

(297

)

(6,245

)

Adjusted EBITDA (c)

26,216

29,019

227,260

324,850

Net cash interest expense (d)

(38,057

)

(33,618

)

(148,027

)

(133,976

)

Maintenance capital expenditures (e)

(8,704

)

(3,322

)

(22,317

)

(14,244

)

Cash paid for taxes

(6

)

(1

)

(315

)

(778

)

Proceeds from asset sales

1,208

1,720

7,440

6,730

Distributable cash flow attributable to equity investors (f)

(19,343

)

(6,202

)

64,041

182,582

Distributable cash flow attributable to general partner and non-controlling interest

(387

)

(124

)

1,281

3,652

Distributable cash flow attributable to common unitholders

(18,956

)

(6,078

)

62,760

178,930

Less: Distributions paid to common unitholders

9,715

49,791

38,860

200,467

Distributable cash flow excess/(shortage)

$

(28,671

)

$

(55,869

)

$

23,900

$

(21,537

)

Propane gallons sales

Retail - Sales to End Users

119,294

111,188

572,978

552,986

Wholesale - Sales to Resellers

53,429

51,990

227,690

227,545

Total propane gallons sales

172,723

163,178

800,668

780,531

Midstream operations barrels

Salt water volume processed

4,940

3,703

18,752

15,512

Crude oil hauled

12,150

11,264

50,135

66,411

Crude oil sold

1,829

1,792

7,507

7,117

(a)

Non-cash stock-based compensation charges consist of the following:

Three months ended

Twelve months ended

October 31

October 31

2017

2016

2017

2016

Operating expense

$

-

$

94

567

$

144

General and administrative expense

-

1,787

850

2,939

Total

$

-

$

1,881

$

1,417

$

3,083

(b)

Amounts allocated to the general partner for its 1.0101% interest in the operating partnership, Ferrellgas, L.P.

(c)

Adjusted EBITDA is calculated as net loss attributable to Ferrellgas Partners, L.P., less the sum of the following: income tax expense (benefit), interest expense, depreciationand amortization expense, non-cash employee stock ownership plan compensation charge, non-cash stock-based compensation charge, asset impairments, loss on asset sales and disposal, other income, net, severance expense, unrealized (non-cash) losses (gains) on changes in fair value of derivatives, acquisition and transition expenses and net loss attributable to noncontrolling interest. Management believes the presentation of this measure is relevant and useful, because it allows investors to view the partnership's performance in a manner similar to the method management uses, adjusted for items management believes makes it easier to compare its results with other companies that have different financing and capital structures. This method of calculating Adjusted EBITDA may not be consistent with that of other companies and should be viewed in conjunction with measurements that are computed in accordance with GAAP.

(d)

Net cash interest expense is the sum of interest expense less non-cash interest expense and other expense, net. This amount includes interest expense related to the accounts receivable securitization facility.

(e)

Maintenance capital expenditures include capitalized expenditures for betterment and replacement of property, plant and equipment.

(f)

Distributable cash flow attributable to equity investors is calculated as Adjusted EBITDA minus net cash interest expense, maintenance capital expenditures and cash paid for taxes plus proceeds from asset sales. Management considers distributable cash flow attributable to equity investors a meaningful measure of the partnership’s ability to declare and pay quarterly distributions to equity investors. Distributable cash flow attributable to equity investors, as management defines it, may not be comparable to distributable cash flow attributable to equity investors or similarly titled measurements used by other corporations and partnerships. Items added into our calculation of distributable cash flow attributable to equity investors that will not occur on a continuing basis may have associated cash payments. Distributable cash flow attributable to equity investors may not be consistent with that of other companies and should be viewed in conjunction with measurements that are computed in accordance with GAAP.

(g)

Distributable cash flow attributable to common unitholders is calculated as Distributable cash flow attributable to equity investors minus distributable cash flow attributable to general partner and noncontrolling interest. Management considers distributable cash flow attributable to common unitholders a meaningful measure of the partnership’s ability to declare and pay quarterly distributions to common unitholders. Distributable cash flow attributable to common unitholders, as management defines it, may not be comparable to distributable cash flow attributable to common unitholders or similarly titled measurements used by other corporations and partnerships. Items added to our calculation of distributable cash flow attributable to common unit holders that will not occur on a continuing basis may have associated cash payments. Distributable cash flow attributable to common unitholders may not be consistent with that of other companies and should be viewed in conjunction with measurements that are computed in accordance with GAAP.